Valve’s Steam Service – The Success Story

If you haven’t yet heard of Valve’s ingenious digital gaming store, you’re in for a treat. It’s the largest digital distributor of PC games, and it’s rapidly growing into a money machine for not only the company, but also the game producers.

The process is simple and affordable for gamers. They simply sign up for a Steam account, download the client to their computer, and then have access to purchase and download over a thousand games. The games they purchase can then be played on any computer, combining convenience and affordability.

As of last year, 58% of PC game sales are made through digital distribution, and Steam controls about 51% of that market. Amazon has a meager 11% by comparison. Additionally, the company enjoys higher per-employee profits than both Google and Apple, with at least $350K made per employee, per year. There’s a good chance those employees responsible for keeping the Steam money machine going are enjoying a very comfortable salary themselves.

The game producers also benefit from Steams’ digital platform. Rather than fighting with retailers to get a meager 30% of profits, they enjoy a full 70% cut of profits, while Steam keeps 30%. The Steam-powered machine is still growing, and in 2011, Steam delivered 780 petabytes of games to users, which is over 780 million gigabytes of data. It would take over 1 million Macbook Pros to hold that many games.

The infographic below shows even more data for this growing digital store.